ASML: The Printing Press of the AI Age

ASML makes what many consider to be the most complex machines in the world. They print the vanishingly small patterns that make leading-edge computer chips possible. NVIDIA, Amazon and Anthropic all rely on it to create their products and services. “Without EUV [extreme ultraviolet light technology]… you don’t have AI”, the firm’s chief executive, Christophe Fouquet, tells Scottish Mortgage manager Lawrence Burns in this podcast.Background: When Scottish Mortgage invested in ASML, it couldn’t be certain that its efforts to harness EUV light would succeed. The holding was effectively an informed bet that the Dutch company could pull off one of the “greatest technical endeavours” of the time, as Burns puts it.To achieve this, the firm had to solve engineering challenges, such as generating plasma many times hotter than the sun’s surface tens of thousands of times a second to create the special light. Then, it had to work out how to capture and control it with specialised multilayer mirrors. All this was done to print billions of transistors in spaces often as small as a fingernail.ASML’s achievements have pushed computing to new limits, not least enabling the training of artificial intelligence models, including Claude, ChatGPT, Gemini, Mistral and MiniMax. As Fouquet discusses in the podcast, the company has recently launched a next-generation version of its EUV system to underpin further AI advances and other capabilities for years to come. “Whatever happens… ASML wins,” says Burns. “It’s an agnostic royalty on AI demand, and more broadly, compute demand.”Timecodes: 00:03  Coming up…01:08  Introduction02:53  Christophe Fouquet interview begins03:21  Printing transistors05:11  ASML’s origins05:57  From a shack to EUV08:46  Long-term relationships11:37  Moore’s Law “on steroids”15:08  A cyclical industry18:43  DUV v EUV21:03  Spending on R&D to stay ahead22:23  Why bet on EUV?25:27  High NA EUV27:39  An engineering mindset31:15  China sales restrictions36:01  ASML’s changing culture38:29  An unknowable future40:39  Lawrence Burns on the investment case50:26  Podcast lookaheadRead the glossary.Check the podcast description to ensure this content is suitable for you. Your capital is at risk. Presenter: Claire ShawExecutive Producer: Leo KelionLine producer: Jessica RooneyBroadcast Technician: Samual O’Hare Editor: Jody Black Hosted on Acast. See acast.com/privacy for more information.